European Union Investigating Apple and Other Publishers for E-Book Price Fixing

The European Union is investigating whether Apple and five other book publishers engaged in anticompetitive practices in the e-book market.

The Euro Commission is investigating alleged illegal pricing agreements between publishers restricting competition. The investigation is looking at Apple, Hachette Livre, Penguin, Harper Collins, Simon & Schuster, and Verlasgsgruppe Georg Von Holzbrinck. And no, I did not just make that last name up.

The investigation stems from earlier this year when the commission conducted “ unannounced inspections” of several companies in different European countries. The commission will examine the agreements companies made for evidence of breaching EU rules on cartels. The UK’s Office of Fair Trading has already conducted and finished its own investigation, but continues to help the Commission as their investigation is extending its scope across all of Europe according to the BBC.

Apple, and many of the same companies were the targets of a U.S. lawsuit filed in August accusing them of illegal price-fixing. The previously covered change from “Wholesale” pricing to Apples “Agency Model” effectively put third-party e-book retailers and their applications out of business in the U.S. Before, the Agency Model publishers simply set a suggested wholesale price, and booksellers were free to set their own prices and offer discounts at their discretion. Apple’s model allows publishers to set an e-book price and allows booksellers or the company selling the content to take a 30% cut. It may seem similar, but because the margins are predetermined, the price of books run the risk of being less competitive industry wide especially as independent retailers become incapable of delivering content.

Competition in the marketplace is always a good thing, but in the case of Apple’s walled garden, they value control more than competition within their content ecosystem. The EU is notorious for investigation consumer rights violations and traditionally hasn’t shown Apple much special treatment. It’ll be interesting to see how the Commission treats allegations against Apple and other publishers in the coming months.